Online Retailing Comes of Age 228
The final Christmas shopping figures for 2001 are not in, but some industry analysts believe the new savvy and sensitivity of online retailers might have rescued the U.S. Christmas shopping season in the wake of September 11, when a lot of people either stayed home or tightened their belts. "I can't be quoted on this until the figures are finished," a friend and research analyst e-mailed me, "but I believe online shopping really saved retailing last year. The sites and service are getting so much better, and consumer confidence in them -- especially among women -- is skyrocketing. Online retailing is not only on the rise, it's really getting to be fun and easier. More importantly, they grasp customer service, something almost no software or hardware company yet does."
If that's so, and it definitely matches my personal shopping experiences, it's huge news for the Net. Consumers, chronically abused by the software and hardware industries, were initially anxious about buying things online. They worried about hackers, crackers and security; they faced poor customer service and complex downloading and other problems. But those problems -- unlike similar headaches in the larger computer industry -- are being addressed.
Retailers competing online this holiday season were a lot shrewder, says a story on About.com about the online retailing industry.
About.com cited a survey of 63 retailers who found a successful holiday season marked by a surprisingly effective combination of widespread promotions and discounting. Most consumers hate spam, but it doesn't bother them so much if it's about things they want, and if they're getting something for the attention. Both multichannel and Web-based retailers seemed to have learned a lot from past marketing missteps. The Shop.org/Boston Consulting Group (BCG) found that more advanced retailers, after carefully studying the economics of each online and offline promotion, are finding ways to offer the minimum discounts necessary for increasing sales volume and ways to deliver targeted promotions to the more than 100 million consumers estimated to have used the Net over the holiday season.
Besides that, sites have radically improved their graphics and visual representations of products. As fears about theft and security have subsided, companies have radically upgraded their customer service. This is in striking contrast to tech industries which sell products that are confusing and difficult to use, and either makes themselves unavailable to confused or outraged customers or charge them extortionate fees for "priority service," which is really just the service they would be entitled to for free in any other business.
If you want to see smart web businesses, I'd cite two in particular -- L.L. Bean and Pet Food Direct. L.L. Bean's site architecture is brilliant -- well organized, easy to navigate. It shows clear pictures of all of its products and allows easy customer access to account information, while still providing security. More interestingly, the site offers customers several ways to get instant help -- phone, instant messaging, nearly instant e-mail response. If you're encountering problems, you can simply e-mail or call and a human will respond promptly. This support is crucial to building consumer confidence. A shopper is much more likely to risk buying something online if they know they can get help with any problems. Tech shoppers are among the most distrustful on the planet after years of confusing products and poor service.
Pet Food Direct also offers a different kind of targeted retailing, e-mailing customers weekly about specials, sales and promotions on the products they have already demonstrated they want and use regularly. This isn't quite like spamming, since it's stuff the buyer needs. And the sharp discounts have a way of offsetting any irritation. The site isn't trying to be funny or cute. Rather than promoting a silly sock puppet, it offers heavily discounted pet food and reminds pet owners when they are apt to need it. It also offers sophisticated graphic renderings of products and instant customer service both online and by telephone. The purchase takes seconds. The discounts are heavy enough to attract shoppers attention, but apparently not so heavy to erode profits. One reason is that the site, like L.L. Bean, gives the consumer a variety of shipping choices, from regular mail to next day air. And the customer pays for shipping, choosing exactly how much of a discount he or she wants. In both cases, the sites don't spam -- they target people who have bought and need their products.
Dozens of other sites have similarly polished their presentation, honed their sense of marketing and discounting and, most importantly, invested in tech support and customer service. Shoppers feel secure not only through repeated use, but through the sense that somebody will speak to them if problems arise.
This is something that, alas, computer and software companies still haven't learned.
Consumers more confident, savvy about ecommerce (Score:1, Redundant)
Consumer confidence in ecommerce and the Internet is growing despite the effects of the weakening economy, according to a joint survey by Yahoo! and ACNielsen.
It seems consumers are becoming more confident about disclosing their credit card details online and more trusting that goods they've ordered will be delivered.
And it seems the growth in ecommerce sales comes against the backdrop that consumers realise buying online doesn't necessarily mean the goods will be cheaper than in the high street.
Put together, these results helped the second wave of the Internet Confidence Index register a five point rise compared with June.
Three months ago, the survey predicted that the US would spend $9.9 billion online during the third quarter. This time round analysts predict that the US will spend $16 billion online during Q4 in the run up to the holiday season.
Critically, the survey found that the future growth of ecommerce depends on a strong Q4 and the opportunity it gives ecommerce novices to buy online.
The research found that if these "light" Net users (those who use the Net less than once a day) have a good online shopping experience they're more likely to become regular eshoppers.
And turning "light" users into "heavy" Net users is key to making ecommerce part of mainstream consumerism.
Said Rob Solomon, VP and GM of Yahoo! Shopping: "The results have further confirmed what we have experienced over the last two holiday seasons; holiday shopping has become the impetus for light Internet users to shop online, many of whom in turn become regular online shoppers
Re:Mod Article Down (Score:2)
Jeff Bates, executive editor of Slashdot.org, said that he had no reason to doubt the report and that he was aware that Mr. Katz had known Junis for a long time. "I know that Jon has reason to trust him if nothing else," he said.
Mr. Katz said Junis had agreed to take part in a public question-and- answer session on Slashdot.org soon, once things settle down a bit in Afghanistan.
Katz's Deserved Embarassment and Humiliation, set in NY Times Roman [nytimes.com]
Amazon.com (Score:1)
Re:Amazon.com profit didn't come from book sales (Score:2, Interesting)
amazon has a large amount of cash on hand. they moved this around in the financial markets last quarter, and happened to make quite a killing. if this weren't factored in, they still lost money.
so yes, Amazon.com made money from good business practices, but not from selling coffee table books.
Re:Amazon.com profit didn't come from book sales (Score:2)
So what you're saying is that it's more secure than the vast majority of physical credit card transactions! Who would sign up for that?
Is this really news? (Score:1)
Re:Is this really news? (Score:1)
Re:Is this really news? (Score:1)
Re:Is this really news? (Score:1)
Expen$ive programming manuals for ~$12 less
Amazon.co.uk was where I could get the new Pratchett books with the original cover art, instead of the ugly Harper/Torch artwork done, probably by the CotB's nephew
Obscure or out of print books
Shipping has been a problem, tho, with one book taking 3+ weeks to get from Fernley NV to Santa Cruz CA, not the first time they blundered, either, less than impressed with ability to track, tho much of this rests on USPS shoulders as well (it's possible the first was in the wreck of a USPS semi on I-80 about the time the book would have shipped.)
Software is a whole nother animal and with Egghead gone I'm not sure where to order that evil, proprietary, closed-source stuff I occasionally need. Programmer's Paradise? Any others. Amazon does carry software, and just about everything, but Imelda's shoes.
Re:Is this really news? (Score:1)
Remember that online, you usually can't pick up and examine the merchandise. To those with limited mental capacity, that would seem to indicate that online retailers are at a disadvantage compared to brick and mortar retailers. To those with a little more capacity for intellect, this doesn't matter - we all know we can go to a real store and examine goods and then still order them online for less. But those limited intellect "experts" didn't understand that and assumed that no one would want to buy something they hadn't checked out moments before.
And of course, the other surprise about Amazon's profit is that I doubt many expected it this soon, given Amazon's prior cash-burn rate in the heyday of the "digital economy." I certainly didn't expect Amazon to be profitable during the death of the dot.gone and a recession to boot.
RagManX
Ok, so they made a profit... (Score:1)
Re:Ok, so they made a profit... (Score:1)
I somehow doubt Amazon's continued profitability depends on your purchase of Salmon of Doubt next quarter. But thanks for the laugh.
RagManX
In case you hadn't noticed.... (Score:5, Informative)
Online retailing has not come of age.
Re:In case you hadn't noticed.... (Score:2)
Amazon does not exclusively represent online retailing. To judge online retails based on Amazon would be as foolish as judging discount stores on the now bankrupt K-Mart.
Amazon was a pioneer. Sometimes pioneers get eaten by bears while exploring. Maybe these second generation online retailers have learned a thing a two from the experiments of previous businesses like Amazon and will be successful.
Has online retail "come of age"? I have no idea. We won't really know until we can look back in persepective. But Amazon's problems certainly aren't solid evidence of online retails immaturity.
Re:In case you hadn't noticed.... (Score:3, Insightful)
The model for retailers seems to be a couple of mediocre quarters, with a big profit during the holidays. Amazon seems to be on their way there, as the losses have been slowing down, but the next year is really the make-or-break year for them, I think.
If their model is to be a catalog reseller, they're screwed. Just look at Fingerhut as a good example. One day they were the shining e-commerce wing of a major brick-and-mortar retailer chain. Now they're being shut down.
I can see LL Bean being a better example, but even they've had tough times. They recently laid off a couple of hundred people, and they've diversified into storefronts and alternative brands (like Freeport Studio for women) to keep the business going. And they're private - Wall Street isn't a factor for them, either.
One does not imply the other (Score:4, Insightful)
There are plenty of us privately-held small companies out here with revenues under 100 million making money consistently even in this economy with online sales - we're just not screaming FOR THE LOVE OF OUR STOCK PRICE LOOK AT US on the cover of (fill in trendy New Economy magazine). We left "dot coms" behind as a benchmark long ago - we were interested in growing a business, not getting a Webby. We do it from small towns you fly over and get no closer to Silicon Valley than changing planes in SFO on our way to meet with a new supplier in Asia. We like Amazon if it gets our customers familiar with the idea of using a website to place an order (and Amazon has our attention and respect by doing many, many things worth emulating in terms of providing service to their customers) - but as far as strategy and finance go, we have much better and suitable models to follow.
Those who have been successful see this medium as simply another another sales channel, a mechanism to reduce expenses (particularly in transactions and support), and the extension of an already successful business model. We did not need 100 million of venture capital, an instant army of programmers, content managers costing half a million dollars, and consultants selling us "solutions". Instead the many silent successful firms grew our online sales channel just as we grew the rest of our business. Small at first, learn and add as necessary.
Catalog companies like LL Bean or Lands End are successful because they have taken advantage of the medium, yes, but also because they already have a super-efficient logistics system in place. That's one reason I'm surprised Wal-Mart is not a bigger online player - distribution and logistics innovations are what made them untouchable in the traditional retail arena.
At least your spelling was correct... (Score:4, Informative)
-sk
Re:At least your spelling was correct... (Score:2)
Re:At least your spelling was correct... (Score:2)
Now those are the standard, supported by peer review, accounting methods that gave us Enron? If I had any Amazon stock, that report would make me dump it.
Re:In case you hadn't noticed.... (Score:4, Informative)
It was a true net operating profit helped largely (and readily admitted by Amazon) by a favorable swing in the euro exchange rate. They expected a pro-forma profit and delivered a bonus profit.
Do you actually know what a pro forma profit is and why people use it? GAAP accounting forces you to account for non-cash charges like the amortization of goodwill.
For example, Amazon bought PlanetAll in 1998 for $250MM. How much money left their bank account? $0. It was paid for in stock, how much stock did Amazon buy on the market and transfer to PlanetAll? $0. They issued new stock that was authorized (and which the market, if it prices based on perfect public info) should factor in to some extent. Now they have to amortize that cost over time. But it wasn't a real $$ cost. So if you're looking at the operating performance of the business and you're trying to decide whether you should invest based on on-going normal operations you shouldn't (debateable of course) look at non-cash charges. Thus you look at Pro-Forma Operating profit.
Oh, and yes, the currency swing is also excluded from pro-forma profitability because it is a non-recurring cost (gain)
Re:In case you hadn't noticed.... (Score:2)
umm. (Score:2, Insightful)
A bit too early? (Score:3, Insightful)
This is what happened with the dotcom hype. People jumped on the bandwagon too early, and got shot down. I'd be interested in seeing a report on ecommerce in like 2-5 years.
Your point is? (Score:2, Flamebait)
Hmmm... Amazon turned a profit, someone knows more about this topic at about.com than you and you like LL Bean's website. So what?
oh... and this is rich...
Most consumers hate spam, but it doesn't bother them so much if it's about things they want, and if they're getting something for the attention.
Like what? An X10 camera?
Good news for us in the middle of nowhere. (Score:3, Interesting)
Being in the middle of nowhere (Upstate Pennsylvania), with the closest mall being about an hour away, almost all my shopping for "special" and "hard to find" things takes place online. I easily spend 80 percent of my alloted "mad money" online. If only FedEx and UPS would commit to getting packages here on time. See, if you are in some areas that they deem "remote", they don't honor any type of delivery guarantee.
Re:Good news for us in the middle of nowhere. (Score:1)
Re:Good news for us in the middle of nowhere. (Score:2)
It's a miracle Amazon is still in business (Score:5, Insightful)
In the crazy times of the last few years Amazon overpaid for the land where the warehouses are based, and for the warehouses themselves. I've heard that they are only at 30% of capacity or so year round except for the holiday season. Instead of being high tech, Amazon has had to master such things as distribution channels and inventory management. Concepts that are decades old and have been perfected by old time competitors suchas Wal Mart.
Then there is the debt. Around $2 billion worth. If Amazon can convert the debt to stock then it would free up tens of millions in free cash flow and really let them invest in the business and grow.
Re:It's a miracle Amazon is still in business (Score:3, Insightful)
new customer interface (Score:2)
I do agree that perhaps they should not have gotten so much into the "bricks" and built warehouses, etc.
Re:It's a miracle Amazon is still in business (Score:2)
"Death" of Retail (Score:2)
Of course there will always be a demand for physical retail, but we are seeing lots of retail chains gonig through ahrd times.
Re:"Death" of Retail (Score:1)
Re:"Death" of Retail (Score:3, Insightful)
While I doubt all retail will die, I can see certain branches of it dying.
For instance, I used to be such a regular customer at EBX that the sales staff knew me by name. I do appreciate that personal relationship and the customer service... but why should I spend 40 minutes driving to and from the mall (which is now farther away thanks to moving a few miles to a new house) when I can go Click, Click, Boom and have the same game delivered to me two days later? The wait is worth the convenience. I haven't been to EBX in awhile, as a result. Amazon gets my buys.
Packaged goods, things that don't change in quality (CDs, books, movies, consumer items, and such) are simply easier to obtain over the web. No need to inspect the box; reviews and opinions are online and the item you buy is the same as the item anyone else would buy. The Yes/No buy decision doesn't need to be compounded by the hassles of real-world consumer retail.
Re:"Death" of Retail (Score:1)
Re:"Death" of Retail (Score:1)
Depends on the product - I certainly don't need to touch/feel/try on a DVD, or video game. However, I'd NEVER buy clothes online.
Re:"Death" of Retail (Score:2, Interesting)
Here (in the UK), the catalogues are very popular with girls: you get a free ~1Kpage glossy catalogue to flick through, and if you see anything you like, you just return the (pre-paid) form, stating the garment number and your size. The thing arrives in a few weeks, and shortly afterwards you get a statement (and a new catalogue every season). So long as you pay off something like 5% of what you owe them every month, you're free to keep on ordering until your wardrobe bursts.
Seems to me that if this is a viable business model, surely people could be persuaded to sign up for an internet-based equivalent, particularly if they delivered the goods as quickly as Amazon (often I used to order books, standard delivery, last thing in the evening before I left work at 5pm; and would come in at 8am the next morning to find them waiting on my desk).
Here is where the real "TECH" happens (Score:3, Insightful)
When I left Kmart in 1990 we ordered stock by counting goods on the shelf. Those numbers where then entered on a paper sheet that went back to the office where a worker would enter the numbers into the computer...the next day.
Started at Wal-Mart 6 months later. Ordering new stock went like this. Look at the item on the shelf. Is the count less than low stock count set by the department merchandise manager? If so, scan the barcode label. The scanner then wirelessly sends that information to the computer in the office where an order is sent to Bentonville. About a day or two later new stock hits the shelf. Wham, bam, order placed. And their distribution warehouses...damn little stock. Most items go out just as fast as it comes in, the logistics are phenomenal. Lots of conveyer belts with scanners directing stock, leading from supply trucks to Wal-Mart trucks.
The late Sam Walton knew technology was important to stay ahead of the competition.
Kmart never got it. Now haven't they have filed for Chapter 11 protection? Needed to hire some 'puter nerds I guess.
FrontLine's "Dot.Con" edition had some numbers (Score:3, Insightful)
I suppose it could be that there is enough room for a few big e-retailers since the really big ones get free customer awareness since they have more mind share, but those numbers speak to a real difficulty to get a sustainable business online due to low customer loyalty inherent when there is no geographic locality and hence no physical reality to such retailers. It could be that Amazon is merely reaping the high advertising costs in previous quarters and will tank once that mind share that cost so dearly to develop wears off.
Re:FrontLine's "Dot.Con" edition had some numbers (Score:3, Informative)
This is about the most important thing you can know about your customers. I saw the show (Frontiline is the best thing on TV IMHO) and essentially what he said was that they felt justified in spending $80 to $100 to get a customer because online customers were supposed be to be very valuable. In the end, the average margin he took in from one of these customers was only $10, so the whole thing fell down. This is the single biggest factor in the fall down of most online retailers. Everybody assumed that it was worthwhile to spend $100 to get somebody in the door online but it wasn't true, it is almost the same value traditional retailers get per customer if not less .
This is a very interesting part of marketing, and the reason I am thinking about making a career switch to marketing weasel. It is a really challenging proposition to sit down in front of all your customer data and try and figure out who the valuable ones are and why.
I don't think most people realize what a jewel Amazon's customer information is. When you look at the stuff they track on people's buying habits it is just amazing. Everybody sees the "you might also liek this book" part but think about this, you have someone who has purchased the 5 most popular books this year, all 2 to 3 months before they became hot sellers. Want to know what is going to be the next bestseller? watch what that guy buys. That is a pretty simplified example but this stuff really does work, and aside from maybe The MTV Group, Amazon.com is the very best in the business.
Some sites need to buy a clue (Score:5, Informative)
In too many cases, it's an event of "I want to buy this - where do I go to find it?" And after wading through too many pages just to figure how how to buy an additional battery for a laptop, when all I should have to do is click on "laptops - maker - model - accessories" I'll finally give up and call my CompUSA (hey, not my choice - my company has an account with them) just to get the job done.
Then I go over the Amazon. And while I complain about the whole "targeted ads" market, I like how they do it. They show new anime titles I might not have heard of, or books that I may be interested in, and occasionally buy when I say "Hm...Niel Gaiman's American Gods - I've been wanting to read it anyway", filter out the ones I tell them I own, and generally make it *easy* to find what I'm looking for. I'll usually check them first even if I don't think they carry it, just in the hopes that maybe they do.
The most important thing any online company can do when selling products: Let me find what I'm looking for. That's all I ask for, and all I expect. I don't want shockwave, or animated
I just can't figure out why so many online stores are dead set on keeping me from buying anything.
Of course, I could be wrong.
Re:Some sites need to buy a clue (Score:1)
It is your DUTY to tell e-tailers that their sites suck! If you don't take the time to explain how badly their shopping cart or catalog browsing is, don't complain here. I certainly take the time to let everyone know, in clear descriptive terms how it doesn't work. They've often put a lot of money (or just got suckered for a lot) into building the site or contracting it out and if you don't tell them it's bad, it'll certainly stay bad. Don't feel you're too small a fish for your opinion to matter, it's the one or two church-ladies out there who complain to the paper with a circulation of 700,000 that get a strip dropped because they never got any.
Re:Some sites need to buy a clue (Score:2)
My voting is done with my dollar. If I can find what I want, I buy it. If I can't, I go somewhere else that can do the job for me.
That's all the information they need from me. Last time I checked, McDonald's doesn't go "Gee, nobody complains that the McCrap Burger doesn't sell", they say "Gee, nobody fucking buys the McCrap Burger - cancel it!".
Than again, I'm also a typical american bastard who feels my time is too important to waste it telling other people how to do their job.
Re:Some sites need to buy a clue (Score:2)
There's a difference there. It's the difference between bad products, and bad presentation. What if a website had the best prices you've seen, but it was impossible to find the product you're looking for easily?
People not buying products could mean that the product sucks, or that they can't find them. The store has no way of knowing which one unless you tell them.
If the product sucks, screw em. But if the products are good, and you just have trouble navigating, making sure the site is improved may be worth the time you'd take to send them feedback.
Re:Some sites need to buy a clue (Score:2)
Marketing is as important to a business as the product is. Sadly, some companies (Microsoft) have only good marketing (which is the only reason why they're still around), while other companies (Novell) have crappy marketing but great products (which is the only reason why they're still around).
But a true business (ie: people who expect to get paid for what they do) needs advertising just as much as it does good products. And as a consumer, I can't be expected to call up these companies all the time and say "Gee, I *love* NDS! But would you get your heads out of your asses and try putting some public commercials on that make sense instead of a bunch of damn goldfish that would probably eat each other if you put them in one big tank?"
The store should find out when people don't buy their fucking product. That means either a) the product is bad, or b) their marketing is bad. I'm sure if McDonald's had an advertisement that showed Michael Jackson raping babies, then discovered that their McKid's meal didn't sell, somebody would say "Hm...is it the meals or the ads? Let's change one and see what happens." And if that didn't work, they'd finally try changing the product. Or hire people to do polls.
*It is not my job to tell companies how to sell things. My job is to decide if I want to buy it based on the product and their marketing.* If they ask me and offer me $5 to tell them what's wrong (or a free toaster, or one of those red vibrators), then I'll be happy to tell them. Otherwise, they can kiss my ass if they think I'm just going to look all over their site for an email address and say "Hey, I couldn't find your Raspberry Flavored Snack bites because your system uses IE based javascript tags my browser couldn't read. Could you alter these pretty please?" I don't get paid to do other people's jobs.
Those that adapt and learn live. Those that don't die, and good riddance to them. If there's anything I've learned from the dot.com bust, it's that marketing without product doesn't mean shit (unless you've got $32 billion in cash, not stock), products without marketing is shit (because nobody buys it), and that Linus Torvalds gives me a damn woody.
Re:Some sites need to buy a clue (Score:2, Informative)
( I hope I get the html right)
e _id=32 [pricegrabber.com]
:)
/Disclaimer
http://www.pricegrabber.com [pricegrabber.com]
Home > Computers > Notebooks & Accessories > Batteries & Adapters
http://www.pricegrabber.com/search_attrib.php/pag
DONE, as a bonus, you get the cheepest price
Disclaimer
I work at pricegrabber
Other smart sites (Score:2, Interesting)
Re:Other smart sites (Score:1)
sigh. (Score:4, Interesting)
>This is something that, alas, computer and
>software companies still haven't learned.
Gateway and Dell is a pretty big difference from Amazon, LL Bean, and pet food. People buy media, books, food, clothes on a monthly basis.
I mean, do you think Dell should send emails saying, "As someone who bought a hard drive in the recent past, you might be interested in our hard drive specials this week!"
Different businesses, different marketing. Then again, you didn't have to think about it because you're Jon Katz, and its been demonstrated that your articles don't have to make sense.
Re:sigh. (Score:2, Insightful)
I also think the article is pretty optimistic about how well non-computer retailers "get it." For example, Mrs. Dew is with child now, and I made the mistake of ordering some clothes from A Pea in the Pod's online presence. Handy tip to online retailers: if *you* send the wrong merchandise, you'd better fall all over yourself to make it right, because otherwise, we won't be buying your overpriced swag again.
On the other hand, I've dealt with a few small businesses whose web sites weren't exemplary, but were adequate to get me engaged, and whose customer service made me a very happy customer. These include non-computer businesses such as Sunburst Shades [sunburstshades.com] and computer businesses such as Delta Marketing Group [dmgi.net].
While Jon seems to be claiming that peddlers of general merchandise are doing better than peddlers of computers/software, I don't think this conclusion is at all borne out in my experience. The industry or vertical market a business is in seems to have little bearing on how positive they make their web shopping experience.
Sweeping generalizations == a bad thing (Score:1, Offtopic)
I usually don't touch your articles because frankly, the usually suck. Occasionly you make a good point, but I mostly attribute that to "even a broken clock is right twice a day" syndrome.
If you are going to write articles about online retailing you really need to do a lot more than check out two sites that do it well in your opinion and then make broad unsupported claims about the "software and hardware companies".
Do some actual... oh I don't know, research! One of your sister sites, ThinkGeek does an *excellent* job with their site as does Crucial Memory.
Also, I know you must be an uber-geek and build your own rigs, but even so, you really should check out DELL or the Apple store to see some big name hardware retailers that really do get it.
If you are going to use Slashdot as your personal soapbox, that's fine. Just have something to say rather than just talking out of your ass.
No one sees a profit? (Score:4, Funny)
I was pretty sure that I personally would see a profit this year, and I was right. Jon - are you projecting?
--
You're reading Managed Agreement [slashdot.org].
It seems pretty simple to me: (Score:4, Interesting)
2. Juggernauts like Amazon.com have weathered the storm and can finally mark up their goods a bit. They got our attention with low prices and cheap delivery, taking enormous losses. Now we're used to Amazon-ing all our Christmas presents and don't mind paying a little extra for it.
Re:It seems pretty simple to me: (Score:4, Funny)
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Comment removed (Score:5, Interesting)
Customer Support? (Score:5, Informative)
...Don't you realize that one of the cost cutting measures Amazon undertook over a year ago was to eliminate telephone customer support. To the contrary of what the article is trying to point out, I don't think it bodes well for ecommerce, when the larger player in the industry says "DO NOT CALL US".
Re:Customer Support? (Score:2)
Now Think Geek! There's a place I like. It has a focused product set (geek toys and schwag) and some things they have I can't find anywhere but Think Geek. I have been able to find Penguin Mints at Meijer, but try finding things like Jolt in all of it's flavors, XTZ tea, Hyper Caffinated coffee and computer books all in one place. I have no idea how they are doing, but I do know I occasionally buy stuff from them. I do it because they have unique products I can't find anywhere else. It's just a bonus that it helps Slashdot out.
Wow! Capitalism works, after all! (Score:2, Insightful)
This is the nature of the capitalist system. It adjusts and adapts to profitability, and is essentially agnostic regarding the means. Internet, fax, mail-order, customer service, whatever you need to do to sell your product or service.
When you boil it down, Jon Katz is telling us something that we all know, which is the basic fundamentals of a capitalist market system. Will he next go to the hospital maternity ward and tell us how "An amazing revolution is taking place where humans are reproducing other humans. My worries that the species will go extinct are over!"
Pro Forma (Score:1, Informative)
Also, as it was already pointed out, the 4th quarter is the most profitable
Re:Pro Forma (Score:2, Informative)
Most retailers are still a bunch of arse, mind... (Score:5, Funny)
Some other interesting post-Christmas tidbits are popping up, too
Yeah, at my house they're all the fucking Xmas presents that didn't show up in December.
Re:Mod parent up please! (Score:2)
Also check out your seller on there first too. It's sort of like the feedback system for pricewatch.
cut the chafe away and get to the meat (Score:3, Funny)
I can see the thinking behind their sites now:
Hmm, people will want to come to our site to browse for clothing. I know, rather than display articles of clothing at a nicely discounted price, let's show them a monkey!
Hey look at the monkey, make the monkey swing!!
btw, if you like our site, or our monkey, here's a way for us to spam you to oblivion with stupid stuff you won't want! Yeah, we are gonna make a profit now!!
Yes, I am slightly exaggerating, but damn, stupid sites won't make money...nough said
Amazon is still WAY in the red (Score:3, Insightful)
Whhaaaa?! Who's Katz shopping with? (Score:1)
wtf. (Score:1)
abusive tech industry? (Score:1)
The point, as I understand it, is that Amazon, et. al. are doing well because they have philosophically distanced themselves from the "tech" industry in terms of their treatment of customers.
What?
Could it be that the author made the connection between people like Amazon and people like Symantec because they both ended in
It seems to me that the writer is making the claim that the
Online B&M is the key. (Score:2, Interesting)
One thing Katz didn't mention was the importance of an online retailer having a "brick and mortar" presence. Amazon takes orders for Toys 'R Us and Target. Other stores strongly link their online stores with their B&M chains. For example, Best Buy and Circuit City allow you to return purchases made online. However, Staples treats their online store as if it were a completely different entity. Last I heard, Staples.com was still loosing money hand over fist.
There was one thing Katz got dead on: it's all about women. Men buy stuff, but women shop. Ever go to a department store like Macy's? All of the men's stuff is in one spot in the store. Women's clothing is spread out over different floors. I think you are going to see the successful online retailers try to find out what women want in an online shopping experience and try to make it a reality. If so, returning merchandise is going to be a big thing for women. Obviously, the B&M retailers have an advantage here. Why go through the bother of shipping it back when you could drop it off during your errands?
Nothing New (Score:3, Interesting)
Online retailing hasn't come of age because "online" retailing as a separate type of retail business doesn't really exist. Most of the retailing going on is nothing more than another form of catalog retailing. The only real difference is that the retailer's catalog is more widely available. The people who've done well in online retailing are the people who've done well in catalog sales. LL Bean is a good example that. I dunno if Amazon is an example of much of anything other than how to siphon off VC funds.
The interesting field of online commerce to me is that of retailing services online and brokering. Neither of these has really come of age yet. However, Ebay has been an early success in the area of brokering goods and services. Online travel is another success in this area. I mean how many of us actually buy airline tickets through an agent anymore?
Amazon Turned A Profit? (Score:1)
for hell? I bet it is cold.
Re:Amazon Turned A Profit? (Score:2)
Offset against their net losses (IIRC that was in the billions).... well the weather report doesn't show snow _just_ yet.
The future truly is bright if we can point to that, and say they're a success. The dotcom boom all over again!
Re:Amazon Turned A Profit? (Score:2, Funny)
What the...? (Score:2, Funny)
Amazon turned a profit?
You know, I knew it was getting a little cold down here, but I never saw this coming.
[/devilish]
Free tech support? (Score:2)
Buying computer parts online - OFF TOPIC (Score:2)
Re:Buying computer parts online - OFF TOPIC (Score:2)
Anecdotal statistics (Score:3, Insightful)
Yes, people are stupid that way just as before they argued, on slim evidence, that online retailing would change everything.
The final Christmas shopping figures for 2001 are not in, but some industry analysts believe the new savvy and sensitivity of online retailers might have rescued the U.S. Christmas shopping season in the wake of September 11, when a lot of people either stayed home or tightened their belts.
Ahhhh, I see, so the same idiots who wanted to predict the future and have been wrong in the past, are now pontificating on how they were wrong (again) and that they have a new prediction. Tell ya what. How about we wait for a few quaters of profitability (nay, a few years) before we start spouting off on how in the future, all work will be done by shiny metal robots before. Until then, I'm not devoting anymore cycles to analysts, futarists, pundits, Jon Katz or any of the other self-important wankers whose parasitic existence distract those of us who actually, ya know, DO THINGS WITH OUR LIVES!
What e-commerce is and what it isn't... (Score:2)
Re:What e-commerce is and what it isn't... (Score:2, Interesting)
And yet, I've never ordered anything via mail order, ever. But, I order stuff online all the time. I've spent thousands of dollars online at dozens of retailers. So, if it's exactly the same thing, why do I use it, but don't use mail order?
You could make the argument that I'm just irrational. That's fine, but it still doesn't change the fact that there is something about e-commerce that appeals to me (as a consumer), and mail order doesn't.
Brilliant (Score:2)
A new Katz classic (Score:3, Funny)
Never tell Katz you can't be quoted - that's one challenge you can be sure he'll take on.
Price comparisons (Score:4, Insightful)
The resulting price erosion decreases the e-shops profits.
In order two compensate for this, e-shops can take one of two paths:
- Reduce costs
- Compete on features - differenciate from the competiotion.
The first path is the one being taken by Amazon - they are trying to use their size to increase efficiency in the package and delivery (ie a small number of big warehouses with efficient - and expensive - automated processes) thus decreasing costs. Since they are competing on prices, prices cannot easily go. On the other end of the scale, it gets increasingly difficult to cut costs (the same rule as in software development applies - the first 10% of investment get you 90% of the improvment). Increasing profits in this situation is thus a difficult task.
The second option is to offer exclusive/improved features than the competition. E-shops have great difficulty in differenciating from the competition in anything other than prices. Site structuring is getting similar, and any e-shop with the necessary basic structure in place (web catalog with search engine) can compete in price with the greatest of the industry. Extra web-based-facilities like costumer reviews are in practice lightly-coupled to the buy - you can easily search books in Amazon, check the costumer reviews, and then go buy it somewhere else.
At the same time, differenciation in more physical properties (like fast deliver and swift costumer service) presents e-shops in a less then ideal light by comparison with traditional shops (the fastest delivery is going to a bricks&mortar shop, buy something an take it home)
In the end this will mostly be good for the consumer:
- The ones that are more interested in spending less money will find cheaper prices.
- The ones more interested in features will be offered all sorts of special (and as of yet unimagined) features by both b&m-shops and e-shops.
Are we there yet? I don't think so!
I see Amazon as using the second approach (Score:2)
A lot of times I can find things I want a bit cheaper elsewhere, but I order from Amazon anyway as I can be pretty sure things will go well and I'll get what I want quickly.
.
Re:Price comparisons (Score:2)
C- (Score:2, Funny)
only online shopping problem (Score:2)
And lets not forget the money markets (Score:3, Interesting)
Also from my experience internet service has not improved and the interfaces that sites are using to process orders and give service is still generally poor. Unfortunately I do not think that the Darwinian law of Survival of the Fittest really applies to the last tech sector down turn. Unless the fittest means those that still have financing in place. The death rate on the internet may have dropped, but there is still more to come.
L. L. Bean (Score:2)
Many a time have I had to go in and change somebody's password to "asshole" and their email address to "postmaster@llbean.com" so I'd stop getting their misdirected email from their unconfirmed signup with a typoed domain. It's another one of the reasons I changed my mailer configuration back to bouncing misdirected mail.
keep in mind (Score:2)
And good luck with their 800 number. When you call it you're informed that it is now a toll call, and the average wait time is 55 minutes!
Why I never buy online (Score:3, Funny)
2. I like going out seeing people, meeting new people
3. I don't want to have to wait a month for them to replace my product, if it doesn't work, I want to beable to go back to the store and return it that day.
online retailing won't replace the real thing the same way television didn't replace the movie theatre. Many people, especially women, like shopping.
Yes - Yes - Yes (Score:3, Informative)
What's your definition of spam? (Score:2)
I'm not knocking your story or anything. But the definition of spam is important. If I buy a product at an online retailer, and thus give away my address, I don't mind them sending me advertisements for things similar to what I've bought in the past. I don't considert that to be spam. It's controlled. It only comes from companies that I've directly done business with. However, if one of the companies SELLS my e-mail address and I start getting advertisements from other companies for similar products, we now have a problem. I've never done business with these companies, and I'm getting unsolicited e-mail from them. That's spam. I don't care whether the products interest me or not. Getting 50 e-mails a day from different companies I've never heard of advertising deep discounts on 100GB hard drives isn't going to please me, no matter how good the discount is.
Having said all of that, I still think any good retailer should include an opt-in box when you're providing them with your e-mail address. That way, they only send you advertisements if you want them.
Customer Support vs Technical Support (Score:2, Interesting)
BOTH are customer service issues, and BOTH are huge opportunities for a company to shine in the relationship department with their clients. However, neither of them are free. While one may not charge the customer up front for the service, both of them generate overhead in the form of manpower, office space and benefits (remember those?). New concept here: the purpose of a business is to Make Money; not sure, but I think that is why they call it a business. So, if one is not charging for their customer service, chances are good that they are either rolling up the cost into their product prices, averaging the support costs over their entire customer base, OR they are eating it, and will likely be in the red soon. This may not be true in every case, but certainly is when dealing with a staff dedicated to support issues.
FACT: People still like "real" stores (Score:2, Interesting)
However, most people prefer to shop in person. They like to touch the merchandise, maybe even talk to someone about the product. And if they take it home and it doesn't work, they like to be able to drive back to the store and return it.
Returning purchases made online is a mixed bag at best. Sending the item back usually involves a loss on your part. Even if the retailer pays return postage (how many do that?) you still have the hassle of shipping the item.
Another thing that happens when you return a product to a real store is that you typically buy something else there. This doesn't happen online.
Online shopping isn't going away, but IMO it isn't going to grow much larger then it is now.
Why Amazon and Egghead and ... (Score:4, Interesting)
Both have intelligently designed websites, good prices, good availability and, perhaps above all, reasonably priced and quick shipping. Both of these companies have been in business nearly as long (if not as long -- I'm just using my memory) as Amazon, without resorting to the bizarre expansions and gimicks.
Why we should judge online retailing by Amazon.com is beyond me. I suppose one argument is that Amazon sells a wide range of books, whereas Bookpool specializes in a niche market. I bevelive this is a bogus argument: the internet is all about niche markets, and attempts to use it otherwise are stupid. Television is a way to force your message down every person's throats. The internet is a way for people to find what they *want*.
The niche-nature of the internet has been demonstrated many times, perhaps foremost by Katz when releasing "Run to the Mountain" -- if I remember correctly, he even made it into Amazon's top ten for while. Certainly this didn't happen because of anything Amazon did (except to be known as a book seller, which they're leaving behind). It happened because of Katz's niche marketing.
Who cares if Sears fails online? I'll drive to their store and talk to their staff if I don't know which tool I need, but I need it now or want to see it first. If I know what tool I want, or I don't need it now or don't need to see it first, I'll research tools on the web, and then look for an online vendor with good prices and policies. Is Sears likely to be this online vendor? No. When shopping for computer parts, is CompUSA's online service compelling? No -- their prices are sometimes good, but their shipping is horribly slow (their best is "usu. w/in 2 days", as opposed to "orders by 3PST will be shipped same day").
Is Amazon likely to have the best price on technical books while Bookpool is around? No. Amazon seems to be aiming for "online Walmart" status. However, Walmart succeeded because they could keep their prices low and provide a little of everything (though most of nothing) to geographic communities. Online, geography is irrelevant (except when you ship ground, and if warehouses are distributed then even ground shipping can be fast). As a result, finding a sizeable customer base is easier. That means niche retailers can buy bulk and keep their prices down. Furthermore, niche retailers are likely to carry higher quality goods than Walmart and know more about their products than Walmart.
So why would you go to Walmart, unless they're the only store with what you wanted (which is unlikely)? I expect that if Amazon is still around in 10 years, we'll think of them like Walmart or K-Mart, except less convenient than these stores.
-Paul Komarek
Amazon should provide more ecommerce outsourcing (Score:2, Insightful)
Amazon's strength is that they've figured out how to present a user experience that online shoppers like and will come back for. I know that Amazon now provides the Toys R Us store, and probably a few others (Borders, maybe?).
Amazon should outsource their warehouses, and get more bricks and mortars to outsource their ecommerce to them.
-jimbo
LL Bean (Score:2, Informative)
Well, sure - they're selling our personal info (Score:2, Interesting)
When that story broke, I logged in and removed all my personal information. I haven't shopped there since.
Maybe they finally turned a profit by selling "their" business asset to a bunch of other retailers or maybe even Russian credit card number blackmailers.
Customer service: .net vs .retail (Score:2)
Example ISP call:
'My cable modem isn't working, whenever I try to open a web page, it says it can't find it.'
"Is your computer set to use DHCP?"
'No, I have a cable modem.'
Example retailer call:
'I ordered this blouse from you, and promptly stained it.'
"Cold water wash, ma'am. Use some Woolite if it doesn't come out right away.''But what about..'
"Cold water, ma'am."
If my sock had a hole... (Score:2)
Would they send me a patch?